BOSTON (Reuters) – Venezuela’s currency woes cut nearly $3 billion in profit at U.S. blue-chip companies during the second quarter and prompted Procter & Gamble Co (PG.N: Quote, Profile, Research, Stock Buzz) to remove its operations in the South American country from its consolidated financial reports.

More so-called deconsolidation moves and exits from Venezuela are likely to happen during the second half of the year as U.S. corporations grow increasingly frustrated with Venezuela’s sinking Bolivar currency, according to analysts and U.S. regulatory filings.

Deconsolidating Venezuelan operations means that business can largely no longer hurt or benefit a U.S. parent company’s financial results. Often companies are taking a big one-time charge so that they can ring-fence what is left in Venezuela.

Colgate-Palmolive Co (CL.N: Quote, Profile, Research, Stock Buzz) and Goodyear Tire & Rubber Co (GT.O: Quote, Profile, Research, Stock Buzz), for example, said they also may deconsolidate their Venezuela operations if economic conditions in that country worsen, according to U.S. regulatory filings made this week.

With slumping crude oil prices and debt payments coming due this year, the Venezuelan government has fewer U.S. dollar reserves available to meet the private sector’s demands. As a result, entities may have a harder time obtaining U.S. dollars than any time since currency controls were first implemented in 2003, Ernst & Young said in an April report.

Jack Ciesielski, president of investment research firm R.G. Associates, said if conditions do not improve in Venezuela, he expects to see more companies follow P&G’s lead.

“I’d say the die has been cast,” he said.

Drug maker Merck & Co Inc (MRK.N: Quote, Profile, Research, Stock Buzz) took a $715 million second-quarter hit against profit after it revalued its Venezuela assets using a less preferential exchange rate.

But the biggest impact from Venezuela’s currency woes came from Procter & Gamble. The world’s largest consumer products maker on Thursday announced a $2.1 billion charge against earnings, reflecting the company’s inability to convert Venezuela’s currency or pay dividends.

Beginning in the third quarter, P&G will exclude the operating results of its Venezuelan subsidiaries from its consolidated financial statements.

Hits to U.S. corporate profits in Venezuela accelerated in February when the President Nicolas Maduro devalued the bolivar by 70 percent via a new currency system known as Simadi. Previously, many U.S. companies valued their monetary and non-monetary assets at the most preferred rate of 6.3 bolivars to the dollar. But under Simadi, the exchange rate has been around 200 bolivars.

NEW YORK, July 28 (Reuters) – A U.S. Department of Justice
internal watchdog has referred auditing firm
PricewaterhouseCoopers to a professional ethics panel
over what it called “extensive deficiencies” in an audit of
federal grant compliance by Big Brothers Big Sisters of America.

In a report released on Tuesday, the Office of the Inspector
General said it found multiple omissions in PwC’s work on the
mentoring organization Big Brothers, which received over $23
million in Department of Justice grants between 2009 and 2011.

The report is a black eye for the U.S. arm of PwC, the
world’s second-largest audit firm by revenue. PwC and the other
Big Four audit firms – Deloitte, Ernst & Young
and KPMG – audit the books of the largest
companies across the globe, as well as numerous government
contractors.

“When an auditor does not follow standards or provisions
required in federal audits, that failure constitutes an act
discreditable to the profession,” the report said.

The inspector general said it questioned $19.5 million in
funding that Big Brothers received and recommended that $3.8
million in funds not yet disbursed be put to better use.

After problems were pointed out to PwC by the inspector
general, the audit firm pulled its audit report on Big Brothers
and issued a revised one in January this year, the inspector
general’s office said.

PwC spokeswoman Caroline Nolan said in a statement that the
audit firm was pleased that the inspector general accepted the
revised audit report.

Representatives for Big Brothers were not immediately
available for comment.

Recipients of federal grants are typically required to be
audited annually by an independent audit firm to ensure they
comply with federal regulations.

The inspector general said PwC’s first audit report,
covering fiscal year 2011, found that Big Brothers complied “in
all material respects” with grant requirements.

In its own audit report published in 2013, however, the
inspector general said it found that Big Brothers did not
properly safeguard grant funds and was “in material
non-compliance” with the majority of grant requirements that it
tested.

The inspector general said it reported its findings on PwC
to the American Institute of Certified Public Accountants’
professional ethics division.

NEW YORK, July 17 (Reuters) – TD Bank has agreed to pay $20
million to settle a class action lawsuit accusing it of aiding a
Ponzi scheme that allegedly bilked over a thousand European
investors of more than $223 million, a lawyer for the investors
said on Friday.

The preliminary settlement, subject to court approval,
resolves accusations that TD Bank, part of Canada’s
Toronto-Dominion Bank, failed to properly monitor trust
accounts that held investors’ money and ignored its duty to
investigate suspicious activities under U.S. anti-money
laundering rules.

“This is a terrific result for the class,” said David
Buckner, a lawyer for the investors.

A TD Bank spokeswoman said it is pleased the matter is close
to a resolution.

In court filings, lawyers for TD Bank said investors failed
to show the bank had actual knowledge of misconduct. The bank
provided routine banking services, which did not constitute
substantial assistance to the alleged scheme, the lawyers said.

Filed in 2014, the lawsuit sought damages for investors in
Belgium, the Netherlands and Spain who bought so-called life
settlements marketed through Quality Investments, a Dutch
company with offices at the World Trade Center Amsterdam.

Life settlements are life insurance policies sold to
investors who receive proceeds from death benefits when the
insured person dies.

Dutch authorities in 2011 arrested four people suspected of
running a Ponzi scheme through Quality Investments involving the
sale of U.S. life insurance policies.

The settlement is the second in less than two years
involving allegations that TD Bank failed to report suspicious
activity in accounts allegedly used for a Ponzi scheme.

In September 2013, it agreed to pay $52.5 million to settle
U.S. civil regulatory charges that it failed to uncover and
report suspicious activities by Florida lawyer Scott Rothstein,
who was sentenced to a 50-year prison term for a $1.2 billion
fraud.

The latest lawsuit, filed in a South Florida federal court,
said investors were assured their money and the insurance
policies they invested in would be held in attorney trust
accounts at TD Bank. Instead of being safeguarded, new investor
funds were diverted to pay premiums on policies held for earlier
investors, the lawsuit said.

The lawsuit said TD Bank failed to report suspicious
activity in the accounts, including wire transfers of tens of
millions of dollars to Cyprus, Turkey and other known
money-laundering destinations.

The case is Gevaerts et al v TD Bank et al, U.S. District
Court, Southern District of Florida, No 14-cv-20744

NEW YORK (Reuters) – U.S. regulators are planning their first-ever inspection of an audit firm in China under a pilot program agreed to last week, marking a step toward resolution of a stalemate over accounting oversight of Chinese firms listed on U.S. markets.

The inspection is expected to take place this year, subject to final agreements, a spokesman for the Public Company Accounting Oversight Board (PCAOB), the main U.S. audit regulator, told Reuters on Monday.

The PCAOB has been seeking access to China for audit inspections for years, following a rash of botched audits that led to massive losses for investors in Chinese shares in the United States. China had balked at granting access for audit inspectors, citing sovereignty concerns.

Under U.S. law, auditors that check the books of U.S.-listed companies must be registered with the PCAOB and open to inspections.

“They’ve gotten very little here, but they’re making progress,” said Paul Gillis, an accounting professor at Peking University in Beijing.

“The whole issue is becoming less relevant as these companies flee the U.S. markets to return to China, and that’s really the best for all parties,” he said.

Chinese companies have been pulling out of the United States and returning home, where share prices had surged before a recent pullback. In the media and internet sectors alone, 17 U.S.-listed Chinese companies have said this year they will go private, spurred by a chance to re-list on Chinese exchanges, according to a report on Monday from Mizuho Securities.

The U.S. Securities and Exchange Commission, which regulates U.S. stock markets, has also de-registered dozens of Chinese companies in response to accounting scandals that began surfacing in 2010.

The PCAOB two years ago said China had agreed to grant access to Chinese companies’ audit documents for U.S. enforcement actions against auditors.

Regulators from the United States and China committed to the pilot inspection program in talks held in Washington, D.C., last week, the U.S. Treasury Department said in a report on Thursday.

Senior officials from China and the United States meet annually at the U.S.-China Strategic and Economic Dialogues to work on economic cooperation.

NEW YORK, June 23 (Reuters) – A unit of Minneapolis-based
U.S. Bancorp has agreed to pay $44.5 million to settle a
class action brought by former customers of brokerage Peregrine
Financial Group, which failed in 2012 after its funds were
siphoned off in a long-running fraud.

Disclosed on Thursday in a filing in an Illinois federal
court, the proposed settlement resolves claims that the bank let
Peregrine’s founder Russell Wasendorf Sr. treat an account set
up for brokerage customer funds like a personal checking
account, diverting money for himself and his other businesses.

“We are pleased to have reached a resolution regarding
Peregrine Financial Group,” U.S. Bank spokesman Dana Ripley said
in an emailed message. Ripley said the settlement will have no
impact on the company’s second-quarter financial results.

U.S. Bank, the banking unit of U.S. Bancorp, was accused in
the lawsuit of fraud by omission, breach of fiduciary duty and
aiding and abetting violations of the Commodity Exchange Act.

The lawsuit said Wasendorf misappropriated funds from an
account at U.S. Bank that was supposed to be used exclusively
for the benefit of Peregrine customers.

Wasendorf is serving a 50-year sentence after pleading
guilty to embezzling more than $215 million from thousands of
Peregrine customers in a nearly 20-year fraud.

The futures brokerage filed to liquidate in 2012 after
regulators accused it of misappropriating customer money,
dealing a blow to confidence in the U.S. futures industry just
months after the larger MF Global collapsed.

The proposed settlement, which requires court approval,
would repay about 14,000 former customers more than 20 percent
of the money Wasendorf diverted, before accounting for attorneys
fees and expenses, according to Thursday’s court filing.

In the filing, lawyers for Peregrine’s former customers said
they may seek up to 31 percent of the settlement fund in
attorneys’ fees.

In February, U.S. Bancorp agreed to pay $18 million to
former Peregrine customers to settle a lawsuit brought by the
U.S. Commodity Futures Trading Commission in 2013 over the
Wasendorf fraud.

The Illinois case is: In re Peregrine Financial Group
Customer Litigation, U.S. District Court, Northern District of
Illinois, No 12-cv-5546

NEW YORK (Reuters) – A unit of Minneapolis-based U.S. Bancorp has agreed to pay $44.5 million to settle a class action brought by former customers of brokerage Peregrine Financial Group, which failed in 2012 after its funds were siphoned off in a long-running fraud.

Disclosed on Thursday in a filing in an Illinois federal court, the proposed settlement resolves claims that the bank let Peregrine’s founder Russell Wasendorf Sr. treat an account set up for brokerage customer funds like a personal checking account, diverting money for himself and his other businesses.

“We are pleased to have reached a resolution regarding Peregrine Financial Group,” U.S. Bank spokesman Dana Ripley said in an emailed message. Ripley declined further comment, citing terms of the settlement.

U.S. Bank, the banking unit of U.S. Bancorp, was accused in the lawsuit of fraud by omission, breach of fiduciary duty and aiding and abetting violations of the Commodity Exchange Act.

The lawsuit said Wasendorf misappropriated funds from an account at U.S. Bank that was supposed to be used exclusively for the benefit of Peregrine customers.

Wasendorf is serving a 50-year sentence after pleading guilty to embezzling more than $215 million from thousands of Peregrine customers in a nearly 20-year fraud.

The futures brokerage filed to liquidate in 2012 after regulators accused it of misappropriating customer money, dealing a blow to confidence in the U.S. futures industry just months after the larger MF Global collapsed.

The proposed settlement, which requires court approval, would repay about 14,000 former customers more than 20 percent of the money Wasendorf diverted, before accounting for attorneys fees and expenses, according to Thursday’s court filing.

In the filing, lawyers for Peregrine’s former customers said they may seek up to 31 percent of the settlement fund in attorneys’ fees.

In February, U.S. Bancorp agreed to pay $18 million to former Peregrine customers to settle a lawsuit brought by the U.S. Commodity Futures Trading Commission in 2013 over the Wasendorf fraud.

The Illinois case is: In re Peregrine Financial Group Customer Litigation, U.S. District Court, Northern District of Illinois, No 12-cv-5546

NEW YORK, June 5 (Reuters) – A U.S. federal appeals court
has upheld the convictions of three former officers of
Virginia’s failed Bank of the Commonwealth, saying there was
ample evidence to support a jury verdict that the men committed
a massive bank fraud.

One of hundreds of banks to collapse in the wake of the
2007-2008 housing crisis, Bank of the Commonwealth cost the U.S.
Federal Deposit Insurance Corp about $268 million when it
failed, prosecutors said.

The decision on Friday from a three-judge panel of the 4th
Circuit Court of Appeals leaves intact judgments against the
bank’s former chief executive Edward Woodard, former vice
president Stephen Fields and Woodard’s son Troy Brandon Woodard,
former vice president for the bank’s mortgage subsidiary.

The three were accused by federal prosecutors of conspiring
to defraud the bank of $71 million and hiding the bank’s
troubled condition before it collapsed in 2011.

Edward Woodard was sentenced to 23 years in prison after
being found guilty in 2013 following a 10-week jury trial.
Fields received a 17-year sentence and Troy Woodard received an
eight-year sentence.

Prosecutors said the bank’s troubles started after it began
an aggressive expansion in 2006 and extended many loans without
regard to industry standards. After a surge in the bank’s
troubled loans, officials used funds from related entities to
make loan payments and extended new loans to cover payment
shortfalls, prosecutors said.

During the trial, lawyers for the executives tried to show
that their alleged crimes were good-faith efforts to protect the
bank’s interests during the financial crisis.

In their appeal, the officers argued that they did not get a
fair trial because of multiple errors by the court that
prevented them from presenting a complete defense.

Fields said the court erred by limiting his direct testimony
to seven and a half hours, while Edward and Troy Woodard argued
that they were convicted on insufficient evidence.

In Friday’s order, the appeals panel said the lower court
had the discretion to impose reasonable restrictions on Fields’
direct testimony. Fields was charged with fewer counts than
co-defendants who testified for a shorter amount of time, the
appeals panel said.

The judges also said the government presented ample evidence
against Woodard and his son to support charges of conspiracy to
commit bank fraud.

The cases are: United States v Stephen Fields, No 13-4711,
United States v Troy Brandon Woodard, No 13-4818 and United
States v Edward Woodard, No 13-4863

NEW YORK (Reuters) – A federal judge has dismissed a class action lawsuit accusing Ocwen Financial Corp of fraudulently billing hundreds of thousands of homeowners for needless property inspections, saying the case amounts to no more than a breach of contract claim.

The order by U.S. District Judge Otis Wright in Los Angeles on Thursday ends one of several lawsuits across the country accusing mortgage servicers of charging excessive fees after homeowners miss mortgage payments, pushing them further into debt.

Inspections and other default-related fees were a major profit source for Ocwen, which specialized in servicing distressed loans, the 2014 lawsuit said.

The homeowners sought damages for violations of various California state and federal laws, including the U.S. Racketeer Influenced and Corrupt Organizations Act.

The lawsuit said Ocwen decided to “game the system” by charging borrowers unreasonable fees for property inspections, which mortgage contracts allow servicers to carry out to protect their interests after a default.

It accused Ocwen of ignoring Fannie Mae guidelines that call for assessing individual circumstances to see if repeat inspections are needed.

In Thursday’s order, Wright said the homeowners had no right to enforce the Fannie Mae guidelines because they were not a party to them. Homeowners’ entire theory of wrongdoing depended on the servicing guidelines, and without them they had no case, he said.

The lawsuit also accused Ocwen’s former chairman William Erbey of profiting from unnecessary inspections as a major shareholder of Altisource Portfolio Solutions, the company Ocwen contracted with to arrange for the inspections. Erbey was not named as a defendant in the suit.

In December Ocwen replaced Erbey and agreed to pay $150 million to New York State’s Department of Financial Services and its customers to settle claims of servicing misconduct and conflicts of interest.

Since the settlement, Ocwen has been selling billions of dollars of servicing rights as it streamlines operations.

“We are pleased and agree with the decision of the court,” said Ocwen spokesman John Lovallo.

The case is Mary Lou Vega v. Ocwen Financial Corp, U.S. District Court, Central District of California, No 14-4408

(Reuters) – A federal judge has thrown out a lawsuit by the city of Los Angeles accusing Bank of America of discriminatory mortgage lending, ruling that the municipality had offered no evidence that it was harmed by the bank.

In a ruling made public on Thursday, U.S. District Judge Percy Anderson said Los Angeles lacked standing to sue under the U.S. Fair Housing Act, which requires proof of a “concrete injury.”

Filed in 2013, the lawsuit accused Bank of America and its Countrywide Home Loans unit of violating that anti-discrimination act by making loans to minorities on worse terms than those offered to whites. It said the bank then refused to refinance them on fair terms, causing foreclosures and neighborhood blight.

Loans issued by the bank in Los Angeles’s minority neighborhoods were more than four times more likely to result in foreclosure than those issued in white neighborhoods, the lawsuit said.

Bank of America said in a statement it was pleased with the decision. The bank said it responded “with urgency” to rising mortgage defaults caused by the economic downturn in the United States.

The city’s lawsuit sought damages for lost property tax revenue and increased costs of municipal services in neighborhoods hit by foreclosures.

A spokesman and lawyers for the city could not immediately be reached for comment.

The complaints are among a wave of lawsuits against major lenders over mortgages lending practices before the 2007 housing collapse.

Similar lawsuits filed by Los Angeles against JPMorgan Chase & Co, Citigroup Inc and Wells Fargo & Co since December 2013 are still pending. All three banks have defended their records of fair lending.

In court filings, Bank of America labeled “absurd” the city’s allegations that its conduct caused massive foreclosures in minority neighborhoods. The city’s claims ignored other causes of foreclosures, including the last recession, unemployment and the housing collapse, the bank argued.

Bank of America had also disputed the city’s standing to sue under the Fair Housing Act, which was meant to protect individuals from discrimination and which limited claims to “an aggrieved person.”

The city had argued it had standing under the act because it had an interest in ensuring that its citizens were free from housing discrimination.

The case is City of Los Angeles v. Bank of America Corp et al, U.S. District Court, Central District of California, No 13-cv-9046

NEW YORK (Reuters) – Wells Fargo Bank breached a nationwide 2010 legal settlement involving adjustable-payment mortgages, a federal judge ruled, finding that the bank did not properly evaluate homeowners who applied for help to avoid foreclosures.

In an order on Wednesday, U.S. District Court Judge Richard Seeborg in northern California told Wells to meet with plaintiffs and find a way to remedy its violations, including steps to let some homeowners reapply for loan assistance.

Tom Goyda, spokesman for Wells Fargo, the largest U.S. mortgage lender, said the bank is reviewing the decision and will be working to provide additional information requested.

“We’re quite pleased,” said Jeffrey Berns, lead counsel for homeowners. “I don’t know whether this is going to prevent foreclosures but it is certainly going to open (Wells) up to claims for damages from class members.”

The decision is the latest twist in a long-running dispute over the settlement, which resolved complaints about “pick-a-payment loans.” Wells inherited a large portfolio of these loans with its 2008 acquisition of Wachovia Corp.

The loans gave borrowers the option to initially pay less than the interest due, but the escalating payments that came later contributed to waves of home foreclosures in the 2007-2009 housing crisis, which threw the country into recession.

Plaintiffs’ lawyers for years have argued that Wells was not complying with its agreement to grant loan modifications potentially worth up to $2.7 billion to homeowners who took out the loans. The modifications were an important piece of the settlement, which also called for Wells to pay $50 million to class members.

In court filings, plaintiffs’ lawyers said Wells was not using proper methods to determine whether homeowners were at imminent risk of default and thus qualified for assistance under the settlement.

The lawyers said thousands of homeowners were denied mortgage assistance because Wells used the wrong methods to gauge their financial hardships.

In Wednesday’s ruling, Seeborg chided both sides, saying they “seem to have almost no idea what, exactly, they agreed to more than four years ago.”

He concurred with plaintiffs that Wells breached the agreement by using “evolving and perhaps ill-defined standards” in weighing applications for loan modifications.

He told both sides to present joint or competing proposals for correcting the settlement violations within two weeks.

The case is In Re: Wachovia Corp Pick-A-Payment Mortgage Litigation, U.S. District Court, Northern District of California, No 09-md-2015